How long do I have to wait to cash out my 401k?

Asked over 4 years ago - Lake In The Hills, IL

We are going to surrender our cars and need to cash out my 401k and pension to buy another one, how long do we have to wait after our trustee meeting so that we don't have to report it?

Attorney answers (3)

  1. Alan James Brinkmeier

    Contributor Level 20

    Answered . You can cash out your 401(k) and pay the 10% penalty if you need funds for certain financial hardships and have no other source of funds. The paperwork takes a couple of weeks and the fund release usually takes ten days or so after that.

    The hardships include:

    The purchase of your primary home

    Higher education tuition, room and board and fees for the next twelve months for you, your spouse, your dependents or children

    To prevent eviction from your home or foreclosure on your primary residence

    Tax-deductible medical expenses that are not reimbursed for you, your spouse or your dependents

    Other severe financial hardship

    You cannot take a cash 401(k) withdrawal while you are currently working for the employer that sponsors the 401(k) unless you can prove a severe financial hardship.

  2. Dean David Paolucci

    Contributor Level 14

    Answered . The best practice is to wait until the bankruptcy is closed. This happens about 3 months after the 341 Meeting of Creditors.

    Please check the thumbs up button below if this answer is helpful to you, thanks!

    Very truly yours,



    Dean D. Paolucci, Attorney at Law
    Select Legal, PC
    P> 800-825-7010
    E> Dean@SelectLegal.com

    www.SelectLegal.com





    ------------------------------------------------------------------------
    -----------------------------------------------------
    Disclaimer: This e-mail or other correspondence does NOT create an
    attorney client relationship. This e-mail or other correspondence
    represents a general overview of law developments and should not
    be relied upon without an independent, professional analysis of how
    any of these provisions may apply to a specific legal situation. Any
    information contained in this communication was not intended or
    written to be used, and cannot be used, by the recipient for the purpose
    of legal advice.
    ------------------------------------------------------------------------
    -----------------------------------------------------

  3. Guy Thomas Conti

    Pro

    Contributor Level 9

    Answered . Technically, the 401(k) is property of the Bankruptcy Estate until either explicitly abandoned by the Trustee or until the case closes. Therefore, you may not cash out your 401(k) until the case closes (usually 60-65 days after the meeting if there are no assets for the Trustee to administer) or until you file a motion, with notice to all creditors, to compel the Trustee to abandon the asset.

    This answer if for information purposes only and should not be construed as legal advice or as establishing an attorney-client relationship.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

20,191 answers this week

2,587 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

20,191 answers this week

2,587 attorneys answering